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Amazon And You: How to Maximize the Partnership


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Amazon is a behemoth, there’s no doubt about it. So instead of working against it, put it to work for you. Discover how you can use it to sell to millions of customers, significantly increase sales, and acquire loyal shoppers for your business. In this session, Sage Island CEO Mike Duncan will show you to how expertly navigate the world of Amazon and to use it as a tool to build your business. Mike Duncan is the CEO and Creative Director of Sage Island Digital Marketing, an agency which has spent the last 20 years at the forefront of internet marketing. An innovative thinker and entrepreneur with expertise in start-ups, turnaround, and rapid growth, Mike’s ability to analyze key business drivers and develop compelling strategies has produced countless success stories.

Published in: Marketing
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Amazon And You: How to Maximize the Partnership

  1. 1. AMAZON ANDYOUHowtoMaximizethePartnership MIKE DUNCAN - CEO - SAGE ISLAND
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  6. 6. » Retail stores’ revenue is flat; Amazon continues to grow » 6% of US retail sales come from e-commerce » Amazon accounts for 60% of all US online sales growth last year The Facts Facts about
  7. 7. Facts about
  8. 8. Facts about
  9. 9. Facts about
  10. 10. Amazon accounted for 60% of all U.S. online sales growth last year. Facts about
  11. 11. Facts about
  12. 12. Facts about
  13. 13. Facts about
  14. 14. The record for most items moved from the shelves to the loading docks in one week is 2,086,548. Last year, when Amazon's site went down for 49 minutes the company missed sales of nearly $5.7 million.
  15. 15. » Younger and wealthier shoppers » Buying diverse range of products, notably apparel » The average prime members makes $69K and is 36.5 years old » Millennials make up 37% of Amazon shoppers—largest group » Prime households spend $1500 per year; non-Prime households spend $650 Who Is Shopping On Amazon?
  16. 16. » Competitive pricing » Robust reviews from customers » Fast delivery – especially from Prime Amazon Strengths
  17. 17. 2016 AMAZON APPAREL
  18. 18. Amazon Apparel Brands Franklin & Freeman - Men's dress shoes Franklin Tailored - Men's suits and accessories James & Erin - Women's clothing Lark & Ro - Women's clothing (Also available in Canada) Society New York - Women's clothing North Eleven - Women's accessories for cold weather Scout + Ro - Children's clothing
  19. 19. » Amazon has quietly launched 7 fashion brands » Only sold on Amazon Since 2005 Amazon has added almost as much yearly apparel revenue ($27.8 billion) as the $29.6 billion in sales that the department stores have lost.”
 – Morgan Stanley Amazon Apparel Brands
  21. 21. “We're promised instant catalog shopping—just point and click for great deals. We'll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn't—the network is missing a most essential ingredient of capitalism: salespeople.” -Clifford Stoll, Newsweek 1995 “
  22. 22. » Limited product selection » Security concerns » Logistics cost and timing » Price vs. retail » Salespeople vs. convenience Obstacles of eCommerce
  23. 23. eCommerce Timeline
  24. 24. Overcoming Limited Selection
  25. 25. Overcoming Security Concerns
  26. 26. Overcoming Logistics
  27. 27. Overcoming Price vs. Retail
  29. 29. » Apparel (30 million clothing items available) » Media (top category for Prime users) » Electronics » Groceries (thanks to quick delivery) Basically, Everything Millennials on Amazon
  31. 31. Sell to Amazon 1P / Vendor Central Sell first-party, wholesale, directly to Amazon Retail, using the Vendor Central interface. Sell yourself 3P / Seller Central Sell third-party to consumers through the Amazon marketplace, using the Seller Central interface. Sell Thru Seller(s)
  34. 34. » Amazon buys your products, sells them at “appropriate” prices, and pays you back » Invite-only, generally for larger manufacturers and well-known brands » Cons: inflexible pricing, no access to customer data » No control over customer service » Slower payments from Amazon to you Amazon Vendor Central
  35. 35. » Allows third-party sellers to list products on Amazon » Option to use Fulfilled by Amazon (FBA) to access Prime shipping » Can be used by anyone » Sellers retain full control of product listings and pricing » Better choice for most retailers Amazon Seller Central
  37. 37. Best practices for product titles
  38. 38. Titles should include 4 elements » Variant / Color » Size / Quantity » Keywords (what the product actually is) » Titles are limited to 200 characters • Capitalize first letter of each word • Spell out measurements (“feet” is better than “ft”) • Numbers should be numerals (“5” is better than “five”) • Don’t use ampersands—spell out “and” instead Product Titles Amazon Best Practices
  39. 39. Best practices for product images
  40. 40. » Image must match product in size, color, etc » Product must be recognizable » Image must be a photo, not a drawing » Image must be taken at a flattering angle, focused, and well-lit » Product must occupy at least 80% of image area » Entire product should be in image » Background should be simple and clean to keep focus on product Product Images Amazon Best Practices
  41. 41. Best Practices for Product Descriptions
  42. 42. » Buyers compare product listings to choose what to buy » Information you offer helps them make their decision » Find Amazon ASIN (Amazon’s Standard Identification Number) » Write a full, rich description that includes both basic and detailed info » Include title, image, brand, condition, key features, size, materials, etc » Ensure you meet Amazon’s category-specific requirements » Add product image—this is a must Product Descriptions Amazon Best Practices
  43. 43. Best practices for bullet points
  44. 44. » Testing shows well-crafted bullet points increase sales » Relay key product features & important info » Great for people who are scanning quickly » Maintain consistent order for all products » Begin each sentence with capital letter » Write bullets in fragments and don’t punctuate » Do not include promotional or pricing info Bullet Points Amazon Best Practices
  45. 45. Best practices for pricing WINNERS LOSERS
  46. 46. » Research competition as you develop compelling price point » Take shipping costs into account—this is the main reason shoppers abandon carts » Offer free shipping to increase sales » Clearly communicate shipping policy and delivery times Pricing Amazon Best Practices
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  50. 50. » Good reviews can push on-the-fence buyer into a purchase » 79% of consumers trust reviews as much as personal recommendations » 73% of consumers say positive reviews make them trust a business more » Ask friends, family & loyal customers for Amazon reviews » Send follow up emails after a purchase asking for feedback » Request reviews via newsletters and social media » Offer discounts or giveaways for honest reviews » It’s against the rules to request 5 star reviews Good reviews are key Amazon Product Reviews
  52. 52. PITFALL 1 PRICE PARITY Your selling agreement with Amazon includes a price parity clause, which states that the price you set for items on your Amazon store – including shipping and any discounts – is required to meet or be lower than your price on other online sales channels. Because Amazon is diligent about monitoring and enforcing price parity, you need to be mindful of pricing, especially when selling on multiple marketplaces.
  53. 53. PITFALL 2 LURING CUSTOMERS If your item description contains website URLs or your business/seller name – in text, on graphics or even on photo watermarks – Amazon is apt to take action. Other marketplaces may not be as strict about these names or links, so pay close attention to your listing to ensure you aren’t giving shoppers a reason to click away from Amazon.
  54. 54. PITFALL 3 PRODUCT DETAILS Selling a popular item? Don’t save steps by copying another seller’s listing information; Amazon is on the lookout for this kind of activity. Feel free to compare your data with that of other sellers of the particular item, but don’t duplicate their pages.
  55. 55. PITFALL 4 CUSTOMER FEEDBACK Product reviews are important selling tools, but you need to ensure the info shoppers leave on Amazon about your items is truthful and appropriate. It’s fine to solicit feedback and include links to your review page, but end your involvement there. Don’t ask customers to delete negative reviews, offer compensation for reviews, or review your own store or products.
  56. 56. PITFALL 5 NO STICKERS If you’ve chosen to take advantage of the benefits of FBA – which can include eligibility for Amazon Prime shipping and Amazon’s customer service guarantee – don’t risk that partnership by stocking anything but correctly identified and stickered products. You must accurately label each item so Amazon’s fulfillment system can correctly identify the product within its system. In other words, don’t spam FBA with commingled inventory.
  57. 57. PITFALL 6 CUSTOMER COMMUNICATION Amazon states that sellers must communicate with customers by email only, even if your personal store and other marketplaces are amenable to other methods. Make sure you respond to emails promptly and accurately convey Amazon’s shipping timeframes to your customers.
  59. 59. Winning the Buy Box
  60. 60. » Fulfillment Method - (FBA, Prime Self Fulfilled, etc) » Landed Price » Seller Rating » Shipping Time » Feedback Score » Order Defect Rate » Late Shipment Rate » On-Time Delivery » Customer Response Time » Tracked Delivery Rate » Feedback Count » Refund Rate » Inventory Dept » Cancellation Rate Amazon Buy Box Recipe (Algorithm) 3 cups 2 cups 2 cups 2 cups 2 cups 1/2 cups 1/2 cups 1/2 cups 1/2 cups 1/2 cups 1 tbs 1 tbs 1 tbs 1 tbs
  62. 62. » People look on Google - People buy on Amazon » More Sales = More Momentum = More Sales » Highest average ROI we have ever seen
  63. 63. » Use Google/Social Ads to direct people to your Amazon store » Use Amazon ads to advertise products directly on Amazon » Only pay when someone clicks your ad » Optimized ad performance with keywords, budgets, etc. » Use metrics to monitor success and ROI Advertising
  65. 65. » Company XYZ products are selling well on Amazon through 3P » Amazon reaches out to Company XYZ to sell direct » Amazon matches low price or beats low price to sell more units » Amazon blames low prices on leaks in distribution at the brand level » Prices stay low until brand controls distribution (tough to do) » Retailers become showrooms for Amazon What is happening?
  66. 66. » Target brands with Amazon strategies in place » Look at prices on Amazon when considering a new brand » Exclusivity to SKUs? » Create your own brand » Put pressure on brands to figure Amazon out Can’t beat ‘em? Join ‘em. If the brand has no Amazon strategy, and you can compete on Amazon after all the fees. Just start selling yourself MF/FBA. Retail Strategy
  67. 67. » Determine your Amazon strategy (brand or retail) NOW » Disruption can unearth new opportunities » Keep your friends close. Keep your frenemies closer. » Keep your eyes peeled - Amazon wants to sell everything » Go with the flow - Start swimming or you’ll sink like a stone Key Takeaways
  68. 68. / sageisland